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Greece announces major pension cuts

“These huge cuts target low-income Greeks and those most vulnerable such as women”

(21 May 2010) – In conjunction with the International Monetary Fund (IMF) European bailout, the Greek government recently announced massive cuts in pension benefits. Since December last year a whole raft of austerity measures including huge cuts to the public sector have been announced by the Greek social democratic government following the outbreak of the debt crisis.

“These huge cuts target low-income Greeks and those most vulnerable such as women”, says Peter Waldorff, Public Services International (PSI) General Secretary. “We should aim to generate recovery rather than create difficulties for workers, deplete demand and worsen the economic situation.”

These massive cuts in pension benefits include:

  • Raising women’s retirement age from 60 to 65, to match the age for men, and raising the required pay-in period to receive a full pension from 35 to 40 years. It institutes a six percent pension cut penalty for every missing year.
  • Increasing the effective average retirement age from 61.4 currently to 63.5 by 2015, while still allowing the government to assess penalties for early retirement.
  • Cutting by 10 percent the basic state monthly pension, from €400 ($530Cnd) to €360 ($477Cnd).
  • Reducing pension benefits by basing them on pensioners’ average pay over their working life, as opposed to their final pay at retirement, which is typically much higher.
  • Indexing pension benefits to Gross Domestic Product (GDP), starting in 2014. With Greece’s economy in a profound slump, this is a recipe for further massive cuts.
  • Limiting the list of “arduous” professions that allow early retirement and toughening guidelines for disability pensions.
  • Increasing taxes on pensions of more than €1,400 ($1,855Cnd) a month by 5-10 percent, and
  • Cutting holiday bonuses.

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Source: world-psi.org